Chinese Economy/Development thread (updated regularly)

[Brotherhood]

ECFA to prop up Taiwan economy growth in 2011 - People's Daily Online December 29, 2010

Beginning January 1, China's mainland is to cut tariffs on more goods from Taiwan, and open more service sectors to Taiwan businesses, which is expected to prop up island economy to new highs.

Taiwan's economy is projected to grow by 4.5 percent in 2011 as the cross-Taiwan-Strait Economic Cooperation Framework Agreement (ECFA), which was signed in June, is implemented as scheduled.

The island's Council for Economic Planning and Development said Tuesday that Taiwan has witnessed 10 percent growth in its exports in 2010, mostly to the mainlanders who have become more affluent thanks to rapid economic growth in the past years. The launch of direct flights across the Strait and an increase in mainland tourists has also contributed to Taiwan's rebound from the global financial crisis.

Tariffs on 539 Taiwan products will be reduced beginning the new year, said Yang Yi, the State Council's Taiwan Affairs Office spokesman, at a press conference in Beijing Wednesday. Among the goods, the tariff on 18 island farm products will be cut from 10 percent to 5 percent, which will greatly benefit Taiwan farmers, Yang said.

Also, six mainland service industries – design, hospital, maintenance of civil aviation planes, banking, securities and insurance – will open to Taiwan companies in 2011.

According to the ECFA deal, the mainland will open 11 service sectors to the island. Five industrial – accounting, computer services, conference-providing services, research and development, and film – were opened to Taiwan in October.

Taiwan's economy, according to IMF forecasts, will slightly outperform South Korea, Singapore and Hong Kong, the three other fast-growing economies known as Asia's "little dragons", over the coming five years. Taiwan has lagged behind the three during much of the last decade.

"The peaceful development and relaxation of trade restrictions across the Taiwan Strait were the most important first step" in bringing about Taiwan's growth, said Christina Liu, who heads the Council for Economic Planning and Development.

In 2011, total amount of tariff reduction on Taiwan-made products is projected to reach US$472 million. Some put it at more than US$500 million, which is expected to aid Taiwan's isle economy greatly.

Taiwan has also agreed in the ECFA to reduce duties on 267 items of products made at the mainland.

People's Daily Online

 

[Brotherhood]

Water projects on top agenda of Beijing in 2011 - People's Daily Online December 30, 2010

As extreme weather becomes more frequent in China due to the effects of climate change, the country's weak water projects are facing unexpected challenges, a senior official said.

Chen Lei, minister of water resources, told China Daily that the flooding and drought that affected millions of people this year has exposed many problems.

He said about 130 million people across the country are living in potential flood zones with an area of nearly 1 million square kilometers.

A catastrophic mudslide, triggered by mountain ******** in Zhouqu county in Gansu province on Aug 8 left 1,472 dead, 294 missing and more than 15,000 homeless, according to the Office of State Flood Control and Drought Relief Headquarters.

More than 66 percent of the country's small- and medium-sized rivers do not meet national flood control standards and more than 32,000 small water reservoirs are flawed, according to the ministry.

More than 70 percent of flooding disasters happen in small- and medium-sized rivers, the ministry said.

Besides flood season when water projects are challenged, the lack of anti-drought water projects and the limited capacity of small reservoirs aggravate the drought season that runs from spring to summer every year, Chen said.

At the peak of the severe drought in Southwest China early this year, nearly 21 million people from the worst-hit areas such as Guangxi, Yunnan, Guizhou, Chongqing and Sichuan lacked drinking water, according to statistics from the ministry.

"We are facing the fact that large populations and limited water resources are unevenly located," Chen said.

China's per capita amount of water resources is 2,200 cubic meters -- about 25 percent of the world's average -- and precipitation during flood season accounts for about 70 percent of the annual precipitation.

During the 11th Five-Year Plan (2006-2010) period, China increased reservoir capacity by more than 38 billion cu m and 19 key water projects along the Huaihe River were finished, Chen said.

The total investment in water projects during the past five years reached 700 billion yuan ($105 billion) with nearly 300 billion yuan allocated by the central government, a record high, he added.

By the end of 2010, maintenance work on all 6,240 medium- and large-sized reservoirs and key small reservoirs will be finished to guarantee people's security, he said.

More efforts will be made in the coming 12th Five-Year Plan (2011-2015) period, Chen said.

He said during the coming five years, the ministry will strengthen the flawed water projects, including reservoirs and dams, raising flood control and drought relief capacity and minimizing economic losses and casualties triggered by natural disasters.

By Wang Qian, China Daily

 

[Brotherhood]

China, Indonesia to cooperate on hybrid rice research - People's Daily Online December 30, 2010

A hybrid rice technology cooperation project was officially launched by China and Indonesia in Jakarta, the capital of Indonesia on Dec. 29.

Zhang Qiyue, Chinese ambassador to Indonesia; Haryono, director-general of the Indonesian Agricultural Ministry's Research and Development Section; Chen Peng, president and director of Yuan Long Ping High-Tech Agriculture and others attended the launch ceremony.

The start of the research, which was a signal of improving relations between the two countries, was overseen by representatives of Indonesia's Agricultural Ministry and Yuan Long Ping High-Tech Agriculture, one of China's well-regarded crop varieties development firms, and presided over by Zhang.

The program is designed to be in effect for three years, starting from April this year and ending in 2013.

Referring to two hybrid rice strains brought to the ceremony site, Chen said the two strains were developed by Yuan Long Ping and particularly designed for Indonesian natural terrain.

"These two strains feature higher yield — much higher than most on the Indonesian market — and better quality. They are the achievement of our plan to develop particular stains of rice for Indonesia," he said.

By Zhang Qian, People's Daily Online

 

[Brotherhood]

Chinese investment in US manufacturing rises - People's Daily Online December 30, 2010

On a spotless factory floor, workers wearing hair nets snap together metal frames, cables, and photovoltaic cells to produce metallic-blue solar panels. This sort of work could be done just about anywhere, yet since October, China's Suntech Power Holdings Co has been making the panels in a 36,500-square-meter plant in the Arizona desert.

The sand-colored factory, about 12 kilometers west of Phoenix in the town of Goodyear, brings the company closer to its American customers and into compliance with the "Buy American" requirements in some government contracts. The strategy seems to be working: Suntech plans to double its 75-person payroll by the end of next year.

For 20 years, US manufacturers have decamped to China in search of cheaper labor and parts. Now Chinese companies increasingly are setting up shop in the US to escape trade barriers, capitalize on the US government's alternative-energy push, and learn lessons that could help them in their home market. "It's a little unusual to see it coming the other way," said Wei Tai Kwok, Suntech's vice-president for marketing.

Chinese companies through September2010 invested $2.81billion in US projects or acquisitions, up from $1.73billion in the whole of 2009, according to Rhodium Group, an economic research firm in New York.

It's no longer just State-owned enterprises buying up natural resources to fuel China's ravenous industries. "Now the Chinese are investing more broadly in retail, utilities, and especially new manufacturing," said Thilo Hanemann, Rhodium's research director.

With domestic unemployment hovering near 10percent, US officials have put aside concerns over unfair Chinese competition.

Near Corpus Christi, Texas, the State-owned Tianjin Pipe Group Corp plans to build a $1billion steel pipe mill next year that will employ 500 to 600 people and circumvent 63percent US tariffs.

On Nov 30, Pacific Century Motors, formed by an affiliate of Beijing's municipal government, acquired General Motors Corp's Saginaw, Michigan-based Nexteer Automotive, which makes steering and driveline systems and employs more than 3,600 workers.

China absorbed $7 of outside investment for every $1 it sent to other countries as late as 2005, according to the International Monetary Fund (IMF). Next year the IMF expects Chinese outward investment for the first time to exceed the incoming flow.

The yuan's steady rise could be a further spur, making US assets more affordable for Chinese buyers.

"The yuan is going to continue to rise," said Donald Straszheim, senior managing director for ISI Group in the investment management firm's Los Angeles office.

For Suntech, the world's largest producer of solar panels, with headquarters in Wuxi, China, about 135 kilometers west of Shanghai, a US assembly line means big savings on shipping costs and a foothold in a growing market.

The company says it received a $2.1million manufacturing tax credit through the economic stimulus package on an investment of about $10million, and became eligible to supply solar panels to installers that win government contracts with "Buy American" clauses.

Barry Broome, chief executive officer of the Greater Phoenix Economic Council, spent more than two years courting Suntech Chairman Shi Zhengrong, ultimately selling Shi on his vision of Phoenix as the world's solar capital. Goodyear officials chipped in three months' use of office space in city hall for a nominal $10 fee. The deputy-mayor even baked a chocolate cake for Martin Guo, the plant's general manager.

More than 1,000 people, including numerous victims of Arizona's housing implosion, turned up at a recent Suntech job fair.

"All eyes are on the US market at this moment," said Shi. "We have very high expectations and we believe the US market will grow substantially."

Source:China Daily

 

[Brotherhood]

Subway train production base takes shape in north China's Tianjin - People's Daily Online January 01, 2011

A subway train of six cars being assembled rolled off a production line Friday at a production base in north China's Tianjin Municipality, according to China South Locomotive &Rolling Stock Corporation (CSR).

The subway train is the first of the kind ever produced at the CSR Tianjin Industrial Park, said CSR's chairman, Zhao Xiaogang.

The train, designed to run at a speed of 80 km per hour, has a holding capacity of 1,800 passengers. It will will be used in Tianjin's Subway Line 3, which will begin service in 2011.

The production base, with an initial investment of 3 billion yuan (455 million U.S. dollars), can produce 100 to 200 trains a year. It will attain a capacity of producing 500 trains annually in the next five years, according to Zhao.

Analysts say the base's first product marked Tianjin's efforts to encourage the development of modern and more advanced industries in the city.

The production base will boost the development of emerging industries in Tianjin and contribute to China's economic transformation, Zhao said.

CSR, a state-owned company with more than 80,000 employees, produces about 70 percent of all high-speed trains China.

Source: Xinhua

 

[Brotherhood]

Chinese manufacturers increase trade figures, but multinationals enjoy most margins - People's Daily Online January 02, 2011

Even though the factory he works for produces 2 million computers for various global brands each month, Jin Zhiqiang does not intend to buy a computer assembled by himself for a simple reason.

To Jin, a migrant worker from east China's Anhui Province, having a laptop computer seems too luxurious.

"A computer we've assembled costs about 4,000 yuan (604 U.S. dollars) in the market. The price is three times what I can earn in a month and I just cannot afford it," said Jin, a 37-year-old migrant worker at a laptop computer assembly line at Singapore-headquartered Flextronics' manufacturing base in Suzhou City of east China's Jiangsu Province.

Jin's frustration described the unparalleled chasm between what thousands of his colleagues give and take at Flextronics's Suzhou branch.

Flextronics and many Chinese electronic manufacturers, including Foxconn , the country's largest contract electronics manufacturer, helped China shine its charts of exports in 2010 with their dominant positions in the country's contract manufacturing services and processing trade with world top brands in the computing, industrial, and mobile phone sectors.

Among China's 170.4 billion U.S. dollars of trade surplus in the first 11 months of 2010, 112.5 billion U.S. dollars came from foreign-funded enterprises in China, according to statistics released by the General Administration of Customs last month.

To break down the entire foreign trade figures, China's processing trade surplus hit 291.1 billion U.S. dollars from January to November in 2010, an equivalent of 1.7 times its total trade surplus. This meant China reported a trade deficit in its exchange of goods and services with other countries, excluding the processing trade.

The processing trade refers to the business activity of importing all or part of raw and auxiliary materials, parts and components, accessories, and packaging materials from abroad , and re-exporting the finished products after processing or assembly by companies within China.

Yuqing Xing and Neal Detert, researchers at the Tokyo-based Asian Development Bank Institute, found in their recent study that traditional ways of calculating global trade simply produce a number, but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries, reported The Wall Street Journal on Dec. 16, 2010.

The academic researchers found that trade statistics in China and the United States consider the iPhone to be a Chinese export to the United States, even though it is entirely designed and owned by the U.S. company Apple, and is made largely of parts produced in several Asian and European countries. China's contribution is the last step - assembling and shipping the phones.

That statistic alone reflects how the reality of global commerce is distorted in national trade data and it exaggerates trade imbalances between nations, the journal quoted the researchers as saying.

Edy Jianto, General Manager at Flextronics Electronics Technology (Suzhou) Co., Ltd., estimated that many multinational companies enjoy a gross profit margin between 50 to 60 percent while Chinese contract manufacturers have an average margin of around 3 percent.

"Compared with multinational upstream companies, our profit margin is definitely on the low side," Jianto told Xinhua. "We are still at the bottom of the Smiling Curve."

The Smiling Curve is a theory proposed by Stan Shih, the founder of Taiwan-headquartered Acer company, to illustrate value-added potentials of R&D, production and brand marketing of the value chain in an IT-related manufacturing industry.

According to the theory, R&D and brand marketing form both ends of the value chain and command higher values added to the product than the middle part of production or assembly of the value chain. If this phenomenon is presented in a graph with a Y-axis for value-added and an X-axis for value chain (stage of production), the resulting curve appears like a "smile".

Observers say China's huge trade surplus, whether the data is distorted or not, brings only meager benefits to the Chinese, and its industrial workers, in particular.

Zhang Yansheng, director of the Research Institute of Foreign Economic Relations with the National Development and Reform Commission, said China's contribution to the value-added chain of international trade was limited in migrant workers' assembling and shipping of electronic products, the last step in original equipment manufacturers (OEMs).

Most profits of the "made-in-China" OEM products were taken out of the country by multinationals that own those brands, Zhang said, adding: "This is an irrefutable fact I've underscored for many years."

He said China is now under pressure due to rising costs of labor, land, resources, energy and other factors of production, undermining the low-cost advantage of "made-in-China" products.

"In about five to ten years, such low-cost advantages will be over for China, so we need to seek our new competitiveness in the future," he added.

Source: Xinhua

 

[Solomon2]

"A computer we've assembled costs about 4,000 yuan (604 U.S. dollars) in the market. The price is three times what I can earn in a month and I just cannot afford it," said Jin, a 37-year-old migrant worker at a laptop computer assembly line at Singapore-headquartered Flextronics' manufacturing base in Suzhou City of east China's Jiangsu Province.

Excuse me, but what exactly is the Chinese definition of a "migrant worker"?

 

[StingRoy]

Excuse me, but what exactly is the Chinese definition of a "migrant worker"?

The term migrant worker applies to the numerous minimum wage workers coming from rural and far flung places all over China to work in the factories and workshops.

 

[中国万岁-ProsperThroughCo-]

Silver screen strikes gold in China

By Kathrin Hille in Beijing
Published: January 3 2011 17:40 | Last updated: January 3 2011 17:40
The holiday season in the west may be over but for the Chinese film industry party time has begun.

Blockbusters in the final weeks of 2010, led by the gangster comedy Let The Bullets Fly, helped China’s annual box-office receipts rise 40 per cent to Rmb10bn ($1.5bn).

The film, starring Chow Yun Fat, earned Rmb453m in its first two weeks when it came out at the end of December, and it continues to sell well.

Film companies expect the hunger for entertainment of China’s growing middle class as well as heavy investment in new cinemas to continue to fuel expansion for years.

China has 5,000 screens, about one-eighth of the US. But the country adds new cinemas at the pace of three screens a day, faster than any other market.

“It will be the world’s largest cinema industry in 10 years or less,” says Tony Adamson, marketing head for DLP, the digital cinema technology arm of Texas Instruments.

“China could have as many as 100,000 screens and it would not be over-screened.”

International companies are piling in.

Imax has raised the number of cinemas planned in China by 15 to 96, and Lotte Cinemas of South Korea is planning to build 30 theatres in the country this year.

The lion’s share of the growth is in smaller cities, some of which do not have any cinemas.

Zhang Baoquan, president of Antaeus Group, a real estate conglomerate which is expanding into film, says he expects cinema construction to spread like wildfire in areas outside the main cities, driven by urbanisation and the increasing availability of digital projection.

“In the US only one-third of all screens are digital so far, but I expect China to be 100 per cent digital by the end of 2011,” Mr Zhang says.

While converting existing cinemas requires sizeable investment, there is no additional cost to equip a new cinema for digital projection.

“The increase in screens raises the average revenues per movie, so you can spend more per film – hire better directors, get better scripts, have better special effects,” says Jiang Yanming, one of China’s leading visual effects producers.

“We will be making better movies.”

Recent releases would suggest that this is happening, at least as far as ticket receipts are concerned.

In 2009, China saw its first locally produced horror film, Painted Skin.

Last year, the country’s audiences were treated to a Chinese “chick flick”, Go Lala Go, a Hollywoodesque romance about a Beijing office girl. It made Rmb124.5m.

Fox released its first Chinese-language movie, Hot Summer Days, which it co-produced with Huayi Brothers, China’s largest studio. The romantic comedy made Rmb125.8m.

“These firsts are indicative of the opportunity,” says Sanford Panitch, president of Fox International Productions.

“For a long time, most Chinese films tended to be period, and now you’re seeing more commercially minded films, clearly in response to a growing middle class audience.”

But there remains a barrier to foreign filmmakers.

The Chinese government, which keeps the industry under strict control in the name of protecting public morals and Chinese culture, has an annual quota of 20 foreign films for distribution by two state-owned companies.

The World Trade Organisation ruled last year that China was breaking its 2001 WTO entry terms and that this restriction must be changed.

However, few in the industry expect the government to take meaningful action to open up the market further, so the only way in for foreign film companies is through co-production with Chinese partners.

The films will continue to be censored for sex and violence because China does not have a film ratings system. They may also be banned for political reasons.

Zhang Xun, president of China Film Cooperation Corporation, the state outlet which supervises co-productions, says CFCC rejected a script from Taiwan about a policeman with mafia ties.

She says: “We absolutely do not encourage such films. The institutions of the state are a force for good in any country. We do not hope to describe China’s police as that ugly. We hope that justice can defeat evil.”

CFCC interfered in Yip Man, a kung fu drama set under Japanese occupation in the 1940s.

“The unity and power of the Chinese when the Japanese invaded – none of that appeared in the original script,” Ms Zhang says.

Some foreign studios find such interference too much to swallow. Joint productions are growing more slowly than the market. According to CFCC, it received 75 applications in 2009 and 90 last year.

Excellent that more and more people, especially people not living in the big cities, can enjoy the cinemas. It will also help improving the Chinese movie industry a lot.

 

[Brotherhood]

To back Europe, China vows to buy more bonds - People's Daily Online January 04, 2011

China is to support Spain financially to help it overcome crippling debt woes, as Beijing has vowed to buy more Spanish public debt despite market fears of an Irish-style bailout.

Chinese Vice Premier Li Ke-qiang, authored an op-ed piece in Spain's leading daily El Pais Monday ahead of his arrival in Madrid for a three-day official visit. Li said in his article that Beijing has been buying Spanish government debts to back up Madrid.

"Since China is a responsible investor country in the long-term on the European financial markets, and in particular in Spain, we have confidence in the Spanish financial market, which has been translated into the acquisition of its public debt, something we will continue to do in the future," he said.

"China supports the measures adopted by Spain for its economic and financial readjustment, with the firm conviction that it will achieve a general economic recovery", said the Vice Premier.

Following Spain, Li is scheduled to visit Britain and Germany, the first major overseas entourage by a prominent Chinese leader.

Beijing has vowed since the eruption of the 2008 global financial crisis to act as a bulwark to back up euro-zone economies with its huge hard currency reserves. Chinese economists believe that the country ought to build up its solidarity with the European Union as it is China's largest trading partner. An expansion of euro-zone debt crisis from Greece and Ireland to other euro-using countries like Spain will not only harm Europe but also China.

Since Ireland was bailed out by EU and the International Monetary Fund with an aid package of nearly US$90 billion, investors have shown concern over the deficit being racked up by the Spanish government and its heavy reliance on the bond markets, leading them to demand higher and higher returns.

An economic and financial rescue for Spain would be far bigger than anything seen to date in Europe: the size of its economy is twice that of Greece, Ireland and Portugal combined, said The AFP in a report on Monday. Spanish public debt rose to 57.7 percent of GDP at the end of September from 53.2 percent at the end of 2009.

The Spanish economy, the EU's fifth largest, slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of its once-booming property market, The AFP report said.

It emerged with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second, but then stalled with zero percent growth in the third, according to the report.

People's Daily Online

 

[Brotherhood]

High-tech zones fuel innovation - People's Daily Online January 04, 2011

China's 56 leading high-tech industrial zones have led the country's industrial innovation, playing an important role in the nation's social and economic development, said a statement from the Ministry of Science and Technology's Torch High Technology Industrial Development Center on Saturday.

The center is in charge of China's "Torch Program", which was started in 1988 to boost Chinese industrialization through advanced science and technology.

The statement summarized the achievements of the 56 State-level high-tech industrial zones, which are home to more than 50 percent of China's high-tech firms and provide jobs for more than 8 million people.

With more than 700 research centers and laboratories, research and development (R&D) expenditure at the zones was more than one-third of the national budget for R&D.

About 16,000 patents were granted to companies in the zones, accounting for nearly half of all patents registered to enterprises in 2009. The high-tech zones' overall output reached 2.31 trillion yuan ($350 billion), or 6.7 percent of China's 2009 GDP.

GDP per capita in the zones was estimated at 284,000 yuan ($43,089), more than 10 times higher than the average Chinese person at $3,744, and exceeding that of Japan at $39,738, according to World Bank 2009 figures.

Half a ton of standard coal energy-equivalent was also consumed for every 10,000 yuan of GDP output in the zones, less than half the national level.

Source:China Daily

 

[Brotherhood]

China's 2010 GDP growth likely to reach 10 pct, says central bank chief - People's Daily Online January 05, 2011

China's 2010 economic growth is estimated to reach about 10 percent, according to central bank governor Zhou Xiaochuan.

In a speech published Tuesday by the People's Bank of China on its website, Zhou said he was not quite confident that the nation's economy has returned to normal, as external conditions continue exerting an important impact on China's economic recovery. ' Zhou stressed that China should be prudent in its macroeconomic policies and needs to conduct counter-cyclical adjustments against "over-expansion."

He also reiterated that the government would promote a market-oriented reform of the interest rate regime in a gradual and unwavering way.

Zhou first delivered his speech on Dec. 15 when policymakers were intensifying their efforts to curb property prices and dampen inflation, as the nation's consumer price index hit a 28-month high of 5.1 percent in November.

Source:Xinhua

 

[below_freezing]

High-tech zones fuel innovation - People's Daily Online January 04, 2011

China's 56 leading high-tech industrial zones have led the country's industrial innovation, playing an important role in the nation's social and economic development, said a statement from the Ministry of Science and Technology's Torch High Technology Industrial Development Center on Saturday.

The center is in charge of China's "Torch Program", which was started in 1988 to boost Chinese industrialization through advanced science and technology.

The statement summarized the achievements of the 56 State-level high-tech industrial zones, which are home to more than 50 percent of China's high-tech firms and provide jobs for more than 8 million people.

With more than 700 research centers and laboratories, research and development (R&D) expenditure at the zones was more than one-third of the national budget for R&D.

About 16,000 patents were granted to companies in the zones, accounting for nearly half of all patents registered to enterprises in 2009. The high-tech zones' overall output reached 2.31 trillion yuan ($350 billion), or 6.7 percent of China's 2009 GDP.

GDP per capita in the zones was estimated at 284,000 yuan ($43,089), more than 10 times higher than the average Chinese person at $3,744, and exceeding that of Japan at $39,738, according to World Bank 2009 figures.

Half a ton of standard coal energy-equivalent was also consumed for every 10,000 yuan of GDP output in the zones, less than half the national level.

Source:China Daily

hopefully, the 8 million jobs that are provided there will be expanded to 80 million, as 8 million is far too tiny.

 

[Brotherhood]

China to invest 700 billion RMB in railways in 2011 - People's Daily Online January 05, 2011

China will invest 700 billion yuan (106 billion U.S. dollars) in building railways over the course of 2011, according to a meeting of the national railway work conference.

The money would be used for 70 new intercity projects.

China will open a 33-billion-U.S.-dollar high-speed rail link between Beijing and Shanghai in June, cutting the journey between the two cities in half to less than five hours. China plans to invest 3 trillion to 4 trillion yuan in its high-speed rail network between 2011 and 2015.

China CNR Corp. and CSR Corp., the nation's two largest train builders, surged in Shanghai trading after the government said it would spend 700 billion yuan ($106 billion) on rail construction this year.

CSR, the word's third-largest high-speed train producer behind Bombardier and Alstom, will focus on the domestic market and tap more overseas opportunities, including those in the United States and Europe, to become No. 1 in the high-speed railway manufacturing sector, Zheng Changhong, president of CSR, said in an interview with the 21st Century Business Herald.

Since China rolled out its first high-speed railway between Beijing and Tianjin in 2008, the country has ranked first in high-speed rail for speed and distance.

CSR's CRH380A, China's latest high-speed train, set a world record on Dec. 3 by traveling at a maximum speed of 486.1 kilometers per hour during a trial run on the Beijing-Shanghai high-speed railway — as fast as a jet cruising at slow speed.

The country is operating a high-speed rail network with a combined length of 7,531 kilometers, which is the world's longest. By 2012, this figure will almost double to 13,000 kilometers.

"The next five years will also be a peak period in terms of railway construction, with annual investment touching 700 billion yuan," Zheng said.

China has also stepped up efforts to take a bigger slice of the global market, he said. High-speed rail projects in Thailand and Laos, which China will help to build, are likely to start in 2011.

Since 2003, China has signed agreements or Memoranda of Understanding for bilateral cooperation on railways with more than 30 countries, including the US, Russia, Brazil, Saudi Arabia, Turkey, Poland and India.

According to the government's blueprint, China's railway network will serve more than 90 percent of the population by 2020, with a budgeted cost of 2 trillion yuan.By People's

Daily Online

 

[Brotherhood]

China signs $7.5b deals with Spain - People's Daily Online January 06, 2011

China and Spain signed $7.5 billion worth of agreements on Wednesday, a welcome boost for Spain's recession-hit economy.

Visiting Vice-Premier Li Keqiang also vowed to help Europe beat its debt crisis, as he started his three-nation European tour.

Li told a breakfast meeting of Spanish and Chinese business leaders in Madrid that the signed agreements and contracts cover 16 programs.

The deals reportedly involve the banking, energy, transport and telecommunications sectors. According to the Spanish daily El Mundo, they include Spanish flight simulator manufacturer Indra, and the Spanish branch of Vodafone. It was not clear whether the deals included the purchase of Spanish bonds.

Li said prior to the trip China will buy more of the country's treasury bonds "depending on market conditions".

Spain's finance minister told Li on Tuesday that Chinese investors played an important role in stabilizing financial markets and suggested the two countries join in developing markets in Latin America.

"For Spain, $7.5 billion of deals is a large number, and that will serve as a timely boost for the country's economy," Zhang Min, a deputy researcher on European studies at the China Institute of International Studies, told China Daily.

The Spanish economy, the EU's fifth largest, slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of the once-booming property market.

It emerged with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second but then stalled with zero growth in the third.

Li on Wednesday also met Spanish Prime Minister Jose Luis Rodriguez Zapatero, King Juan Carlos and Foreign Minister Trinidad Jimenez.

During the breakfast meeting Li said that the economies of China and the EU are complementary, with closely interwoven interests at bilateral and global levels.

Li also said that China hopes the EU will recognize his country's full market economy status as soon as possible and expressed his hopes that the EU will ease its high-tech export limitations on China. He also urged the EU to resist protectionism and handle bilateral disputes via dialogue.

Li arrived in Spain on Tuesday, the first leg of his European trip, which will later bring him to Germany and Britain.

Analysts believe that China's help could be important for the EU's recovery.

"I think it's very significant for Europe at large, not just for Spain. I think it sends a very important signal to the financial markets as well," Beat Lenherr, chief global strategist at LGT Capital Management, told CNBC television.

China has previously announced multibillion-dollar accords with Greece and Portugal, the two worst performing economies in the EU.

"China's support for the EU's financial stabilization measures and its help to certain countries in coping with the sovereign debt crisis are all conducive to promoting full economic recovery and steady growth,"

Li said in a comment piece published in the German daily Sueddeutsche Zeitung on Wednesday.

China is now the EU's second largest trading partner and export market and China's imports from the EU rebounded rapidly in 2010.

Chinese analysts said that the visit may also help China explore possibilities of new cooperation in technology transfer, especially green technology, to help ensure China restructures its energy-reliant economy, said Jin Ling, an expert on EU studies at the China Institute of International Studies.

European countries have a traditional advantage in high-tech and clean energy industries, which serve China's needs if it is to transform its growth model.

Yet Jin cautioned that both China and the EU have to do more to build political confidence in each other.

Yang Jing, AFP and Xinhua contributed to this story.

By Wu Jiao and Ai Yang, China Daily